This is up 1.7% from last year and is driven in large part by higher per capital disposable income that makes splurging little more on gifts more accessible to more people, IBISWorld explains in a recent report.
As expected, candy – and in particular chocolate – is a popular pick for sweethearts. According to IBISWorld, 55% of shoppers will gift their loved ones with candy or chocolate – driving up revenue for each category respectively 0.9% and 1% respectively in 2018.
But when it comes to chocolate, not just any option will do. Rather, consumers increasingly want better-for-you options, according to consumer research from Nielsen.
Looking at chocolate sales across 2017, Nielsen reports that sales of specialty chocolate with cacao, which some consumer believe can improve their health, increased26.3% from the previous year.
“Additionally,” Nielsen notes, “chocolates with all natural, clean label and sustainable claims are also on the rise. In fact, 51% of specialty chocolate sales in 2017 came from products that are categorized as clean labeled.”
A closer look at what consumers might consider “clean label” attributes, reveals sales of chocolate free from GMOs grew 11.3% in the 52 weeks ending Jan. 6, 2018, according to Nielsen. Similarly, sales of chocolate making claims about sustainability rose 8.6% while those making claims free from milk were up 6.6%, all natural ingredients 5.7%, less than five ingredients 4.3% and protein claims up 4.2%.
Fresh fruit offers a healthier sweet
While consumer interest in healthier snacking is helping some chocolate products sell better, the trend also threatens overall chocolate sales, as does the “growing negative image of sugar and its impact on rising diabetes rates and concerns with childhood obesity,” consumer research firm Packaged Facts notes in a recent release.
This might explain why so many consumers picked up fresh strawberries last Valentine’s Day, generating more than $52 million in sales, according to Nielsen.
Aside from competition from fresh fruit, chocolate sales also could suffer due to concerns about cocoa farming practices as well as price related to the supply of cocoa and other ingredients are turn-offs for some shoppers, according to Packaged Facts. Similarly, Packaged Facts points out, chocolate sales could take a hit as more consumers opt for self-checkout lines or online shopping, which limit impulse shopping as a driver of chocolate sales.
Chocolate also faces increased competition from the bakery department as the go-to for Valentine’s Day gifts, according to Nielsen.
“Items like dipped and covered treats, cookies and cupcakes are the most popular selling bakery items during the week in which Valentine’s Day falls,” Nielsen reports. Specifically, it notes, dipped and covered bakery treats brought in $10.2 million in the year leading up to Valentine’s Day last year. Similarly, message cookies sold $2.7 million, iced cookies $11.8 million, cupcakes $23.2 million and donuts $1.2 million during the same time period.
Gifts that are easy to pick up, like these, also will likely do better this year because the holiday falls mid-week, making it more difficult for couples to celebrate out, IBISWorld suggests. It predicts a 0.3% contraction on spending on a celebratory night.
Competition from cards declines
Demand for gift cards also is declining, according to IBISWorld, which estimates revenue in this category will fall 4% in 2018 to $710.2 million
“According to Hallmark, Valentine’s Day is the second-largest card-giving holiday of the year, with 144 million cards exchanged on the day,” IBISWorld notes. However, it adds, more consumers are opting for text messages and e-card rather than mailing classic paper greeting cards.